The steel demand in India is projected to grow at 5%-10% in the current fiscal year, primarily due to higher investment in infrastructure and growth in automobile sector.
“India’s steel demand will grow 5%-10% in the financial year that began April 1 (2009)”, said Mr. P.K. Rastogi, Secretary, Steel Ministry of India, as reported by Capital.gr on May 19, 2009. He also denies any hike in steel prices in the country in the near future.
The Indian government has recently given stimulus packages to improve the steel demand which mainly depends on the infrastructure spending throughout the country. The government has given three stimulus packages since December 2008 and has announced investment of $8.95 Billion for the current fiscal year (2009-10) to develop infrastructure like networks of road, irrigation, phones and electricity.
With the second tenure of Mr. Manmohan Singh as the Prime Minister of India, the expectations of steel manufactures have gone up, who believe that the investment in ports, bridges and roads will spur the demand for steel. Rural employment scheme is likely to create more demand for the metal in villages and towns.
Moreover, the performance of the steel industry largely depends on the country’s economic growth, and the stable government at the Centre will give more emphasis to the infrastructure development. Programs announced by the government earlier will be accelerated. Also, the growth in automobile sector will spur the steel demand.
The steel demand significantly slumped during the third quarter of FY 2008-09 ending December 2008, having seen three years of average 15%-20% growth. However, the fourth quarter which ended March 31, 2009 posted an increase of 3.8% compared to the corresponding quarter previous year i.e. the quarter ending March 31, 2008.
The Joint Plant Committee, a data dissemination body under the Central Ministry of Steel, has recently released the steel industry’s statistics showing that the steel production stood at 56.4 Million Metric Tons in the year ended March 2009 against the revised output of 56.1 Million Metric Tons in FY 2007-08.
According to a Research Analyst at RNCOS, “Steel manufacturers are expected to return to their normal operations as they were before the economic slowdown because of rising steel demand. Inventories of steel companies remained high late last year (2008) due to weak demand, but the scenario will change as the demand has begun rising and steel producers will be benefited from it.”
Related Market Research Reports:
Indian Steel Industry Outlook to 2012
US Steel Industry Outlook
China Aluminium Market Analysis
